Tue, Nov 21, 2017 - Page 1 News List

MOF replaces chairmen of three banks

CHING FU FALLOUT:The three banks provided the most funds for a syndicated loan to the firm. The FSC also intends to audit the books of all the banks involved in the loan

By Crystal Hsu  /  Staff reporter

The Ministry of Finance (MOF) yesterday replaced the heads of three state-run financial services providers amid growing discontent over the loan default of Kaohsiung-based Ching Fu Shipbuilding Co (慶富造船).

The ministry issued a statement yesterday afternoon saying that it has named new chairmen to take charge of First Financial Holding Co (第一金控), Taiwan Cooperative Financial Holding Co (合庫金控) and Taiwan Business Bank (台灣企銀).

The three companies reported the heaviest losses from a troubled syndicated loan of NT$20.5 billion (US$681 million at the current exchange rate) to Ching Fu.

Taipei Rapid Transit Corp (TRTC, 台北捷運) chairman Ray Dawn (董瑞斌) has been appointed head of First Financial and its main subsidiary, First Commercial Bank (一銀), the ministry said.

Central Deposit Insurance Corp (中央存保) chairman Lei Chung-dar (雷仲達) is take over at Taiwan Cooperative, while Taiwan Academy of Banking and Finance (台灣金融研訓院) president Bor-Yi Huang (黃伯怡) is to head Taiwan Business Bank, it said.

All three hold doctorates in economics and have years of experience in the financial sector, it said.

First Bank, the lead bank for the loan, lent NT$5.8 billion to Ching Fu; Taiwan Cooperative Bank and Taiwan Business Bank each lent NT$2.8 billion.

The default would erode 30 percent of First Bank’s earnings in the first three quarters and 40 percent of Taiwan Business Bank’s, reports have said.

In related news, Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) told lawmakers that the commission would conduct on-site examinations of all state-run banks that lent more than NT$2 billion to Ching Fu.

Banks that lent smaller amounts would be required to provide audit reports, he said.

The commission is expected to implement punitive measures before the end of the year against the banks involved in the syndicated loan, Koo told a meeting of the legislature’s Finance Committee during a question-and-answer session.

Banks that made loans to Ching Yang Aqua Marine Enterprises Co (慶陽海洋企業), a subsidiary of Ching Fu that was awarded a development contract by the National Museum of Marine Biology and Aquarium, would also be investigated, Koo said.

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